Spartan Posts 1Q Net Loss; RV Revenue Rises
Spartan Motors Inc., parent to Spartan Chasis Inc., reported a net loss for its first quarter, ended March 31, on a 19% decline in revenue.
Sales during the three-month period totaled $96.1 million versus $118.8 million in the first quarter of 2012 due to a decline in sales in the Delivery & Service (DSV) segment. Spartan posted a net loss of $4.3 million, 13 cents per diluted share, compared to a net loss of $2 million, or 6 cents per diluted share a year ago, primarily due to the impact of lower revenue, an accrual for a product recall and costs related to the move of walk-in van production to Bristol, Ind.
John Sztykiel, president and CEO of Charlotte, Mich.-based Spartan Motors, stated, “As we indicated in our fourth quarter 2012 press release and conference call, we expected an operating loss in the first quarter of 2013. Most of the loss during the quarter was due to lower DSV revenue and expenses incurred to move and start walk-in van production at Bristol. During the first quarter, we moved the bulk of our Utilimaster business 22 miles to a much more efficient plant and began ramping up production. Our relocation plan was aggressive and complex, so it is not surprising that we encountered some growing pains during the launch phase at Bristol.”
He added, “We believe the first quarter will prove to be the most difficult quarter of 2013 and is now behind us. Although meeting our targets for the rest of the year is not without its own challenges, I have confidence in our people, our plan and our ability to turn strong backlog growth of 41.1% from the end of 2012, into a profitable second quarter and full year 2013.”
Sales in the company’s Specialty Vehicle segment, which services the RV industry, totaled $29.3 million in the first quarter of 2013 versus $26.1 million in the first quarter of 2012, an increase of 12.3%. The revenue increase was due to higher sales of recreational vehicle chassis and aftermarket parts and accessories (APA), more than offsetting a net decline in production of other specialty vehicles. Chassis sales rose by $2 million to $20.4 million in the first quarter of 2013 while APA sales totaled $6.9 million, up $2.2 million from the first quarter of 2012.
Other highlights included:
• Emergency Response (ER) revenue rose 2.9% to $34.9 million from $33.9 million.
• Delivery & Service (DSV) revenue declined 45.7% to $31.9 million from $58.8 million.
• Gross margin of 6.6% of sales versus 11.6% in the first quarter of 2012.
• Operating loss of $6.8 million compared to an operating loss of $3.4 million in Q1 2012.
• Consolidated order backlog at March 31, 2013, increased 41.1% to $228.6 million versus $162.0 million at December 31, 2012, and up 64.5% from $135.7 million at March 31, 2012.
• Cash balance of $16.6 million at March 31, 2013, compared to $21.7 million at December 31, 2012.
Looking forward, Spartan’s interim CFO Lori Wade noted, “We expect the company to be modestly profitable in the second quarter of 2013, with improving profitability during the second half of 2013. We expect Spartan to be profitable for the year as a whole. For the year, we expect to realize mid-single-digit revenue growth.
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